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Invictus partners with Zim-focused gold miner to investigate gas supply to Eureka mine

Gas tanks

Photo by Bloomberg

23rd April 2024

By: Marleny Arnoldi

Deputy Editor Online

     

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ASX-listed Invictus Energy has signed a memorandum of understanding (MoU) that could lead to a maiden gas offtake agreement with Dallaglio Investments, involving the supply of gas to the Eureka gold mine, in Zimbabwe.

Invictus will supply natural gas from the Cabora Bassa project, in Zimbabwe, as feedstock for the Dallaglio’s proposed gas-to-power (GtP) plant.

The proposed GtP plant will be built by power solutions company Himoinsa and will have an initial capacity of 12 MW, with the ability to increase the plant capacity size up to 50 MW.

The companies’ MoU signed on April 23 includes the start of a feasibility study to determine the optimal delivery of power through either wellsite power generation and wheeling power using existing grid infrastructure, or onsite generation with natural gas delivered through trucks between the wellsite and the mine.

The Eureka mine, which is one of Zimbabwe’s largest mines, is located 50 km south of the Mukuyu gasfield.

Should the project expand to 50 MW, it can sell excess power into the Southern Africa Power Pool (SAPP).

Invictus will supply the power to Eureka and other private offtakers through the local grid or SAPP if excess supply is available from the 12 MW plant.

PILOT PLANS

Invictus in March confirmed the Mukuyu gas-condensate discovery at the Cabora Bassa project, with the company now positioning itself to capture early monetisation opportunities and accelerate timelines to first production and revenue generation.

High-quality natural gas at Mukuyu contains minimal impurities and allows for a simple early production system at the wellsite to produce gas to be used in power generation or compressed natural gas for delivery to onsite power generation at Eureka.

Invictus is building a pilot project using an early production system to provide proof of concept for future field developments. Invictus elaborates that the pilot will gather longer-term production data and dynamic reservoir information to assist in optimising the full field development planning and determining connected resource volumes.

The high-quality gas composition of the field requires minimal surface processing of gas stream, which enables the implementation of a near-term pilot project using a low-cost production system at the wellsite and existing infrastructure to deliver gas and power to end-users.

The pilot will ultimately be used as a project reference for other mines in Zimbabwe, Africa and globally.

FUTURE WORK

Following completion of the feasibility study, Invictus and Himoinsa intend to sign a binding gas sale and purchase agreement under which Invictus will provide natural gas to Himoinsa, which will, in turn, provide power generation equipment and supply electricity to Dallaglio at Eureka.

Himoinsa currently provides supplementary and backup diesel power generation to Eureka and some of Dallaglio’s other mining operations in Zimbabwe.

A GtP plant could provide the Eureka mine with a reliable and cleaner source of energy compared with coal-fired power through the grid and backup diesel power, which is used during power outages in the country.

Invictus MD Scott Macmillan says the MoU is a major step forward in the company’s early commercialisation strategy and demonstrates the immediate monetisation opportunities available to Invictus as it looks to progress the Cabora Bassa project further.

“Eureka’s close proximity to Mukuyu and available infrastructure make this an ideal pilot project and provides us with a line of sight to early production and revenue generation,” he adds.

In turn, more reliable and affordable energy will support Dallaglio’s plans to expand production at Eureka, Dallaglio CEO James Beare states, adding that natural gas will significantly reduce the group’s emissions profile and support the company’s goal to become a more sustainable gold producer.

Eureka currently has a mine life of eight years through openpit mining, but feasibility studies are underway to expand the project through underground mining.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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